Intermediate: Break-even, contribution and profit-volume graph

(a) From the following information you are required to construct:

(i) a break-even chart, showing the break¬ even point and the margin of safety;

(ii) a chart displaying the contribution level and the profit level;

(iii) a profit-volume chart.

(b) State the purposes of each of the three charts in

(a) above. (6 marks)

(c) Outline the limitations of break-even analysis.
(5 marks)

(d) What are the advantages of graphical presen¬ tation of financial data to executives?LO1

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Sales Variable costs 6000 units at 7 per unit 6000 units at 12 per unit = 72000 42 000 Fixed costs = 20 000